Proposal to deregulate could hike phone bills
TALLAHASSEE — Florida phone rates could be on the rise in the not-too-distant future.
In a potential victory for telecommunications giants, legislators are moving to deregulate landline phone service, allowing carriers to raise rates 10 percent a year with no state oversight.
As usual with telecom issues, it’s a big battle between industry heavyweights, with platoons of lobbyists prowling the Capitol and hefty campaign contributions at stake. AT&T alone has 72 registered lobbyists.
On Tuesday, the Senate revived the stalled phone-rate bill and passed it through the Commerce Committee on a narrow, 6-4 vote.
A nearly identical bill is sailing through the House, where the phone-rate bill was approved in its final committee Tuesday and is ready for a floor vote.
Consumer advocates say the bill would mean higher home phone rates and less responsive customer service.
Under current law, phone companies must seek approval from the state Public Service Commission to raise rates. The PSC also sets service standards for repairs and customer complaints.
"Lawmakers should be skeptical of the claim that competition will ensure [that] quality remains high and prices remain low," said Leslie Spencer, a lobbyist with AARP. Seniors on fixed incomes are a particular concern, she said, since they are far more reliant on traditional phone service than younger age groups.
With the phone-rate legislation stalled in the final three weeks of the lawmaking session, supporters made several key changes to revive it. The bill was amended to lower annual rate increases from 20 percent to 10 percent. And for most customers, rates essentially will be frozen for two years, until 2011.
The bill (SB 2626) would narrow the definition of price-protected "basic" phone service. Under the proposal, any phone service with a single upgrade — including voicemail, caller ID or call waiting — would no longer be considered basic and subject to the 10 percent annual rate hikes starting in 2011.
Supporters note that Florida’s regulatory system for phone service was drafted decades ago, long before cell phones and the Internet revolutionized communications. For example, traditional land-line companies, such as AT&T, are competing with unregulated Internet phone providers, such as Skype and Vonage.
"In the real world, competition and our customers set the price," said Marshall Criser, president of AT&T Florida.
The argument persuaded Broward County Sen. Nan Rich, D- Weston, one of two Democrats who crossed party lines to support the measure.
Rich said there was a "misconception" that the bill will lead to higher phone rates.
"I do believe competition is the most important thing," she said. "This, to me, was a reasonable compromise."
Even if telecom giants can push through the deregulation plan before the Legislature’s May 1 adjournment, they’ll face another obstacle: Gov. Charlie Crist.
The governor has hinted at a possible veto, citing consumer concerns, but House sponsor Rep. Will Weatherford, R-Wesley Chapel, said some of the latest changes were based on suggestions by his staff.
"Our hope is we can get it in a position where he can be supportive," Weatherford said.